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Thursday, 24 April 2014

If Scotland goes Independent why would the rest of the UK act as their banker of last resort?

S and P, the independent credit agency have pointed out the inconvenient truth: Scotland will not be able to afford its banks, and would have a credit rating worse than Iceland.

When Iceland's three biggest banks collapsed in 2008, the country's depositor guarantee scheme was unable to repay hundreds of thousands of UK savers who had billions of pounds in high-interest accounts such as Icesave. Lloyds and RBS have already expressed concern about the risk of a credit downgrade in the event of a yes vote. "The impact of a yes vote in favour of Scottish Independence is uncertain," Lloyds said in its annual report, adding that it could affect the cost to the bank of complying with regulations and its tax position.
When it published its results in February, RBS said: "A vote in favour of Scottish independence would be likely to significantly impact the group's credit ratings and could also impact the fiscal, monetary, legal and regulatory landscape to which the group is subject. Were Scotland to become independent, it may also affect Scotland's status in the EU."
Vince Cable, the business secretary, waded into the debate in February when he said that a yes vote would make it "inevitable" that Royal Bank of Scotland would relocate from Edinburgh to London. "If you were managing RBS, I think you would almost certainly want to be in a domicile where your bank is protected against the risk of collapse," Cable told the Commons business committee. More details here: http://www.theguardian.com/politics/2014/apr/23/scotland-independence-agency-rates-scottish-banks

Oh, and by the way Alex Salmond came to Carlisle last night to tell us everything was going to be fine. He wants independence but nothing will change.....